Medical Credit Fund raises 32.5 million euros to support health entrepreneurs in Nigeria, others in sub-Saharan Africa – Nairametrics
Medical Credit Fund (MCF), the only debt fund entirely dedicated to the African health sector, today announced the completion of a € 32.5 million fundraising round from its second fund (MCF II) .
The tour de table was led by the Dutch Ministry of Foreign Affairs, which granted the initial equity injection of 7.5 million euros in January this year to meet the demand for credit during the issuance. COVID-19. CDC Group, with 10 million euros, FMO, with 7.5 million euros, Swedfund, with 5 million euros, and Philips, with 2.5 million euros, are also part of this fundraising. .
This funding round will help the Fund increase its presence and support for health professionals in sub-Saharan Africa, with a focus on primary health services, including malaria prevention and treatment, as well as health and maternal and child care. The funding will also be used to expand its fully digital loan product, known as “Cash Advance,” which has grown rapidly over the past two years.
What you need to know about MCF
The Medical Credit Fund has granted more than 6,500 loans totaling over 120 million euros to African healthcare providers since its inception, with a 96% rate of return on investment. In Kenya, Ghana, Nigeria, Tanzania and Uganda, it reached 1,800 small and medium enterprises (SMEs) in the health sector.
The loans are combined with business development and quality support through the PharmAccess – SafeCare standards and methodology, which have helped 80% of businesses improve their services.
MCF will use the funds to expand its presence in sub-Saharan Africa, with a particular focus on the development of digital lending products. Just five years after the launch of “Cash Advance”, MCF is currently using digital loans for 80% of its disbursements.
Cash advances do not require collateral as the loan is secured by the provider’s history of mobile money receipts. Digital income is used to pay off all debt. Kenyan customers praise the many refund options as well as the speed and simplicity of the transaction, which is done entirely using their mobile phone.
MCF will also benefit from a guarantee facility provided by the United States International Development Finance Corporation (DFC), which was established by the Health Finance Coalition (HFC) with support from the President’s Malaria Initiative. (PMI) and the USAID Center for Innovation. & Impact (CII). The MCF, which leverages catalytic funding from public and private sources, aims to reach € 80 million over the next few years through blended funding.
What they say
Arjan Poels, Managing Director of MCF, commented on today’s news: “I am very grateful for the support we have received from our investors, in particular from the Dutch Ministry of Foreign Affairs. The funds will help fill the funding gap for small and medium-sized health enterprises, enabling entrepreneurs to finance construction work, purchase equipment and avoid drug stockouts. Mitigating the chronic underfunding of the sector means that more patients can receive better health care.
“In Nigeria, over the years, the Medical Credit Fund has made over 930 loans worth over $ 11 million to healthcare SMEs across the country with a portfolio repayment rate currently exceeding 90%. access to less onerous financing, but loans with technical support in the areas of investment advice and quality improvement aimed at improving their health activities.
Clarisa De Franco, Managing Director and Head of Private Equity Funds, CDC Group, said: “Affordable, reliable and quality health care has never been more crucial than it is today. That’s why CDC is excited to deepen its partnership with MCF, an impact-focused fund manager with a proven track record in supporting the primary health care sector in Africa. Our commitment to MCF II will allow the Fund to increase its flexible financing offerings to an estimate of over 2,500 healthcare SMEs, strengthening their ability to meet the growing demand for quality healthcare and to serve approximately 10 million patients by 2030. Strengthening Africa’s health system is an immediate priority that requires dedicated health care funding to help close the funding gap in the market. CDC’s engagement alongside investor partners will serve the dual purpose of stimulating the growth of the health sector in Africa and it will act as a positive signal to the market, attracting even greater investments to scale up companies. inclusive quality health care for millions of people across Africa.
Marnix Monsfort, Director of Financial Institutions at FMO added: “We are pleased to have contributed to this unique fund targeting healthcare SMEs through our Building Prospects and MASSIF funds in the form of a
subordinated debt facility. Given that the Fund aims to reduce inequalities in several of our main markets, with a strong emphasis on gender, we believe that the Fund is uniquely positioned to play a leading role in the area of health and are proud to have been one of the investors for the launch of the second Fund.
Audrey Obara, Head of Healthcare at Swedfund, said: Small and medium-sized private health facilities are essential for increasing access to health care in sub-Saharan Africa, especially for women and children. MCF has a responsible lending approach that empowers healthcare SMEs to deliver higher quality healthcare and operate financially viable businesses. Therefore, the investment in MCF II is well aligned with Swedfund’s goal of supporting sustainable businesses that improve access and quality of healthcare for underserved patients across the industry value chain. . We are also delighted that the fund has a strong focus on digitization and is seen as a 2X investment. ”
Jan-Willem Scheijgrond, Head of Government and Public Affairs at Philips, said: “As part of our commitment to improve the lives of 2.5 billion people per year by 2030 through innovation, Philips aims to expand access to care for 400 million people in the underserved communities. We have seen first-hand that access to finance is the main bottleneck for healthcare providers in Africa to expand their services and invest in areas such as advanced medical imaging technologies. The Medical Credit Fund has proven that it can solve this financial bottleneck, and that is why we are consolidating our long term partnership with our investment in the fund.